Managers' Practices and Employee Productivity in ...

International Journal of Business and Management Tomorrow

Vol. 3 No. 3

Managers’ Practices and Employee Productivity in Selected Multinational Companies (MNCs) in Central Uganda Derick Ssekajugo, Deputy Principal, College of Economics and Management, KIU Uganda, Former Administrator, College of Education, Open, Distance and e-Learning

Abstract

This paper looked at the correlation between managers’ practices and employee productivity in selected MNCs in Central Uganda. The study used a sample size of 210 respondents from the population of 444 respondents. The descriptive comparative and descriptive correlation strategies were employed. The tools for data collection constituted both standardized and non-standardized questionnaires while the analysis was done using mean, Pearson Product Correlation Coefficient and regression analysis. The study findings exhibited the following; the level of managers’ practices was satisfactory with an average mean of 2.98; employees had 8 hours of work per day and material productivity had a mean of 545.14 units; no significant correlation between managers’ practices and material productivity of employees. Managers’ practices contributed merely 2% variance in level of employee productivity. Recommendations for managers of MNCs to absorb as well as exhibit comparative management techniques for sustained productivity were made. Keywords: Managers’ Practices, Sustained Employee Productivity, MNCs

1. Introduction From the tyrannical regimes to economic shocks co-existing with epidemic occurrences, this has not failed the Ugandan economy to persevere as it continues to yearn for Foreign Direct Investment (FDI) which has resulted into the penetration of MNCs in the country. Anchored on the notion; For God and My Country, Uganda seems to be temporal with the fiction; seek your dream actualization then heaven will aid you. Since the late 1980s, ISSN: 2249-9962

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economic liberalization has greatly attracted a number of MNCs in the country. However, since it is widely known that some employers and/or managers in organizations do not fully appreciate the positive role of employees towards improved productivity and performance in the workplace, an obligation is therefore placed on key stakeholders with the government inclusive in the struggle to achieve more positive outcomes. Unlike in the past, nowadays employees in organizations and the management of such employees as observed by Boxall, & Purcell (2003) and Pfeffer (1998) cited in Seidu (2011) is increasingly seen as a key element of competitive advantage. This has been attributed to the fact that the global marketplace facing organizations in the current era is increasingly turning to be competitive plus the ease with which technology, manufacturing processes, structure and business strategy are being acquired. With all such trepidations as observed by Dyer and Reeves (1995), institutions are therefore in a quest to comprehend how their employees can be managed for sustainable competitive advantage. Effective running of institutions requires effective managers. To be an effective manager as observed by Webber et al (1985) requires modern interpersonal ability and old fashioned will power. The manager is in this regard is expected to behave much like the artist by way of looking at human needs and conceive ways to satisfy them. Resources are then applied to create an organization that will produce the desired goods and services. What is unique however is the fact that for managers unlike artists who work alone, working together is mandatory.

1.1 Purpose of the Study This study tested the null hypothesis of no significant correlation between the managers’ practices and employee productivity in selected MNCs in Central Uganda.

1.2 Research Questions   

What is the level of managers’ practices in selected MNCs entailed in this study? What is the level of productivity of employees in selected MNCs involved in this study? Is there a significant correlation between level of managers’ practices and level of material and labor productivity of employees?

1.3 Null Hypothesis H01 :

There is no significant correlation between level of managers’ practices and level of employee productivity.

2. Literature Review 2.1 Definitive Review of Managers

Since the manager’s personal goals are sometimes different from the organization’s objectives, these goals may even conflict with those of the organization. Managers should always become concerned with employees’ personal goals if they are in conflict with those of the organization (Meggison et al, 1989). Most managers as observed by Schermerhorn (1986) are subordinates and superiors simultaneously. As subordinates, managers are held accountable by their superiors or bosses for the performance of their work units. As superiors, managers oversee the running of activities in an organization by all those that are meant to report to them. In this regard, the manager is considered as that person in an organization who is responsible for the work performance of one or more other persons. Hellriegel et al (2002) considered a manager as that person who plans, organizes, directs, and controls the allocation of humans, material, financial and information resources in the pursuit of the organization’s goals. To them, an individual does not have to be called a manager to be a manager. Managers are evaluated on how well the people they direct do their jobs. Drucker (1974) emphasizes that early in the history of management the manager was regarded as someone responsible for the work of other people. However, by the second half of the 20th century, this definition was revised and the manager was regarded as an individual professional contributor with parallel paths of opportunity. What is common in all the definitions is that the manager is the basic resource of the business enterprise having the cardinal tasks of harmonizing major functions of the business enterprise, managing the business, managing workers and work as well as managing the enterprise in the community and society. Just like in several other studies which have been conducted by other scholars and/or institutions, the manager may as well be termed as the supervisor but this does not guarantee that the two are tantamount.

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2.2 Types of Managers According to Lewis et al (2001 pg.12), managers exist at various levels in the organizational hierarchy. What is common in all organizations is the fact that all managers must have the technical, human and conceptual skills if they are to be successful. Managers of tomorrow must therefore be prepared to cope with change if they are to be effective given prevailing hyperchange. Hodgetts (1975); Hellriegel et al (2002) all affirm that unlike in the past where by managers were being classified by organizational level or function, nowadays managers are being classified according to many criteria including the work itself, time horizon and decision making strategy. Cardinal among such classifications are: 1) Technical managers that are concerned with producing goods and services as economically as possible and these are keen on problems with concrete solutions; 2) Institutional managers who face the challenge of coping with uncertainty brought on by uncontrollable and unpredictable environmental elements and they aim at ensuring the organization’s survival and (3) organization managers who coordinate the efforts of the technical and institutional levels.

2.3 Functions of Managers Drucker (1974) just like Williams (2003) and many other scholars in management maintain that managers are the most expensive resource in most businesses- and the one that depreciates the fastest and needs the most constant replenishment. It takes years to build a management team; but it can be depleted in a short period of misrule. How well managers manage and are managed determines whether business goals will be reached. The inferences drawn are that being a manager requires more than a title, a big office, and other outward symbols of rank. It requires competence and performance of a high order. Five basic operations in the work of managers are being stated which include; setting objectives, organizing, motivating and communicating, setting measures of performance and developing people. Koontz and Weihrich (1990) contended that in all kinds of organizations, whether business or non business the logical and publicly desirable aim of all managers should be a surplus. Thus, the manager must establish an environment in which people can accomplish group goals with the least amount of time, money, materials, and personal dissatisfaction or in which they can achieve as much as possible the desirable goal with available resources. According to them, for managers to be effective, they need various skills ranging from technical to design and the relative importance of those skills varies according to the level in the organization. They further argue that analytical skills that are relevant in finding the needs of present customers or potential ones with the motive of satisfying them with a product or service are also expected of a good manager. Such according to them does not disregard the need for the possession of personal characteristics like the desire to manage, communication skills and empathy, integrity and honesty as well as experience. What appears to be plausible which is also recurring right from the inception of the term management is the utmost certainty regarding the roles of managers as also observed by Duening and Ivancevich (2003) who maintained that managers influence performance by defining objectives, recognizing and minimizing obstacles to the achievement of these objectives, and effectively planning, organizing, leading, and controlling all available resources to attain high level of performance. To them, productivity is a component of performance and not a synonym for it.

2.4 Productivity and its Measurement As economies shift to include the ever-larger proportion of service work, productivity becomes as important for the white collar worker as it has been for the factory worker. Productivity measures how efficiently the organization uses its resources, be they human or capital (Gray and Jurison, 1995 pg.13). Productivity just like quality management is another way of thinking about the entire business operation and this shows the ratio of output to input (Productivity = output/input). Output is something countable (i.e. units produced, dollars etc) and input is the resources applied (i.e. people, energy, capital etc). According to Bain (1982), productivity is a measure of how well resources are combined and utilized to accomplish specific, desirable results. Productivity is important in achieving national, business and personal goals. From the national perspective, productivity improvement is the only source of increased real national wealth since steady growth in productivity is the only way the nation can solve such pressing problems as inflation, unemployment, an increasing trade deficit, and an unstable currency. From the personal perspective, productivity growth is the key to increasing the real standard of livings and best utilizing the available resources to improve the quality of life. In business, productivity improvements can lead to more responsive customer service, increased cash flow, improved return on assets, and greater profits.

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Levis et al. (2001) considers productivity as a measure of the efficiency with which the firm performs the transformation of process (i.e. the ratio of system outputs to system inputs). Productivity = Output Input Any increase in the numerator or decrease in the denominator of the productivity equation will result in a productivity increase. Productivity enhancing tactics are therefore being related to technology, people, or design. In a literal sense and as noted by Miner (1985), productivity refers to the relationship between the inputs applied to some transformation process and the output that ensues. This affirms the notion that productivity equals to efficiency in technology, labor, capital and management. The most common single factor productivity measure as observed by Gray and Jurison (1995) is labor productivity. This can be expressed in terms of output per worker or per how worked. Economist use this indicator to determine the nation’s standard of living relative to other countries. For labor intensive industries just like most of the developing countries’ industries, labor productivity is used to determine organizational efficiency. Other single factors productivity measures can be output per machine, output per mass of material or output per some other type of input.

2.5 Determinants of Productivity Bain (1982) accentuates that to improve productivity, the manager has to affect at least one of the following factors: 1) Methods and equipment- which necessitates the implementation of a constructive change in methods, producers, and / or equipment with which results are accomplished and such requires automation of manual processes and elimination of waiting time or delays; 2) utilization of resource capacity- which requires multishifts, rather than single shift basis, and maintaining only enough inventories and 3) performance levels which focuses on the ability to elicit and sustain the best efforts of all employees. This necessitates gaining full benefit of the knowledge of long term employees, establishment of the spirit of cooperation and team work among employees, motivating employees to accept organizational goals and designing and implementing an employee training program.

3. Methodology The study employed the descriptive comparative and descriptive correlation strategies. A minimum sample size of 210 respondents was used. Data on managers’ practices and employee productivity within the selected MNCs were collected using standardized and non-standardized questionnaires. The validity and reliability coefficients of the questionnaires were determined and these had the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy coefficient of .894 and .883 respectively which were translated as being superb. In relation to the objectives of the study, the following statistical parameters were employed; 1) the mean to compute for the level of managers’ practices and level of employee productivity; 2) Pearson Product Correlation Coefficient for the significant relationship between managers’ practices and employee productivity and 3) the regression analysis (R2) for the influence of the employee productivity on managers’ practices.

4. Findings Table 1: Level of Managers’ Practices in the Selected MNCs, (n=210) Item Mean Interpretation My boss gives credit for work done 3.05 Satisfactory My boss is well prepared to respond to competition 3.05 Satisfactory My boss inspires the staff 3.05 Satisfactory My boss gives positive comments for good work 3.04 Satisfactory My boss capitalizes up to date technology to take the lead in work 3.00 Satisfactory My boss keeps his/her promise to staff 2.98 Satisfactory My boss can forecast political changes that may affect production 2.91 Satisfactory My boss cares for our health, safety & general welfare 2.90 Satisfactory My boss adapts his/her practices to the changing expectations of the work in 2.83 Satisfactory which he/she operates Average Mean 2.98 Satisfactory Source: Primary data, 2012

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International Journal of Business and Management Tomorrow Legend Mean Range 3.26-4.00 2.51-3.25 1.76-2.50 1.00-1.75

Response Mode Strongly agree Agree Disagree Strongly disagree

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Interpretation Very satisfactory Satisfactory Fair Poor

Results in table 1 above show that the manager’s ability to offer credit for the work done had the highest mean score of 3.05 being interpreted as satisfactory and the item on the ability of the manager to adopt practices basing on the changing work expectations had the lowest mean score of 2.83 but still then, this was also interpreted as being satisfactory basing on the mean legend. Table 2: Level of Employee Productivity in Selected MNCs, (n = 210) Construct Minimum Maximum Number of hours worked in a day 8 8 Number of work outputs or materials completed/accomplished in a day's 428 625 work Source: Primary data, 2012

Mean 8.00 545.14

The number of hours worked were a standard of 8 hours per day while the minimum output was 428 units and the maximum output was 625 units this giving the mean level of output of 545.14 units per worker per day as implied in table 2 above. Table 3: Correlation between Managers’ Practices and Employee Productivity in Selected MNCs in Central Uganda Constructs correlated Computed rPInterpretation of Decision on value value Correlation Ho Managers’ Practices Vs. Number of hours worked in a day .a Managers’ Practices Vs. Material No Significant productivity .053 .446 correlation Accepted Source: Primary data, 2012 Legend If the significant value is equal or less than 0.05 level of significance, the interpretation is significant. If the significant value is more than 0.05 level of significance, the interpretation is not significant. .a cannot be computed because at least one of the variables is constant. As observed under level of employee productivity, the hours of work per employee are a standard meaning that there is a constant and hence no variance in labor input. As such, Pearson’s correlation coefficient could not be computed for managers’ practices and number of hours worked in a day. However, as table 3 indicates, there was no significant correlation between managers’ practices and material productivity of employees in the selected MNCs for this study. This looks as a surprise which requires deep excavation into the matter to attain a justification to such results. Table 4: Regression Analysis Between the Level of Employee Productivity and Managers’ Practices Variables Regressed Adjusted F Sig. Interpretation Decision on R2 Ho Employee Productivity Vs. Managers’ .015 4.049 .044 Significant Rejected Practices influence Source: Primary data, 2012 Table 4 suggests that managers’ practices positively and significantly affect employee productivity. The results also implied that managers’ practices contributed merely 2% towards variance in level of employee productivity.

5. Discussion 5.1 Managers’ Practices Having obtained an average mean of 2.98 which basing on the mean legend conveyed a satisfactory level of managers’ practices, such an average mean level was however just next to the most favorable level implying that there exists some element of unfair practices. As Stiglitz (2007) observes, countries around the world most ISSN: 2249-9962

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especially in the developing part of the world are nowadays competing to attract MNCs by providing greater opportunities. In so doing, MNCs in such territorial boundaries have been chanced to pursue an intolerable trend. Through their managers, MNCs in developing countries have continued to use their huge financial powers to have legislations rekindled to their advantage, they have continued to shield themselves from accountability and to make matters worse, in some circumstances, and MNCs have been linked with the making of developing countries more susceptible to corruption.

5.2 Employee Productivity Labor productivity based on the findings was 8 hours across all the selected MNCs which were in conformity with the national standards regarding work hours. Despite the implausible effort to invigorate the absorptive capacity of the labor market, average labor productivity in Uganda as implied by Ssemogerere (2011) in the United Nations Industry Development Organization (UNIDO) research programme report is still the lowest even by Uganda’s neighbors' standards in Sub-Saharan Africa (SSA).

6. Conclusion

Based on the study upshots, the subsequent inferences were drawn: 1) the level of managers’ practices was satisfactory although this never signified the highest level which was implied by very satisfactory; 2) managers’ practices predicted merely 2% variance in employee productivity and 3) surprisingly, the null hypothesis of no significant correlation between managers’ practices and employee productivity was accepted.

7. Recommendations At the epoch where international experience is central to business triumph, when leadership styles are in transition around the world and when managers with the global mindset are momentous as observed by Cullen and Parboteeah (2008), business institutions in the Countries of the South (Developing countries) and just like those enshrined in the countries of the North are required to groom themselves for the evolving global economy. MNCs’ managers must empathize more than the nuts and bolts of national culture. This means that such managers ought to comprehend how individuals from different countries examine organizational strategies and organizations. It is therefore obligatory that managers of MNCs in Uganda and in all other world economies absorb as well as exhibit comparative management techniques for sustained productivity.

Derick Ssekajugo, Deputy Principal, College of Economics and Management, KIU Uganda, Former Administrator, College of Education, Open, Distance and e-Learning

Acknowledgement Kudos to Hajji Hassan Bassajjabalaba for the sponsorship

References                

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